Welcome to our monthly newswire designed to keep you informed of the latest business and tax issues. Please contact us if you have any questions. Remember, we’re here to help.
Auto enrolment letters and updated thresholds
The Pensions Regulator (TPR) has started to write to all small and micro businesses in the coming months as part of a new campaign to give them key information on auto enrolment, including when the duties affect their businesses.
In addition the auto enrolment qualifying earnings bands and earning thresholds have been announced for 2015/16. These thresholds are relevant to employers complying with their automatic enrolment obligations to enrol and then make pension contributions for eligible employees. Employers must meet their obligations from their staging date which can be found by using TPR Website tool.
The revisions in the limits take effect from 6 April 2015 and follow the recommendations from consultation with interested parties.
TPR proposes to revise the limits to the following amounts:
£5,824 for the lower limit of the qualifying earnings band
£42,385 for the upper limit of the qualifying earnings band
These limits are used by employers to calculate how much pension contributions are due where band earnings are the basis of calculation.
The amount someone must earn to be automatically enrolled into a workplace pension (the earnings trigger) will remain at £10,000 per annum instead of being aligned with the personal allowance as it has been for previous years following concerns that low paid workers will miss out on pension contributions.
If you would like help with auto enrolment please do get in touch.
Registration opens for new married couples tax break
HMRC have announced that registration for the new ‘Marriage Allowance’ for married couples and those in civil partnerships is now open.
From 6 April 2015 certain married couples and civil partners may be eligible for a new Transferable Tax Allowance referred to by the Government as the ‘Marriage Allowance’. The allowance will enable eligible spouses and civil partners to transfer a fixed amount of their personal allowance to their spouse. The option to transfer is not available to unmarried couples.
The option to transfer will be available to couples where neither pays tax at the higher or additional rate. If eligible, one partner will be able to transfer 10% of their personal allowance to the other partner which means £1,060 for the 2015/16 tax year which could save them tax of up to £212 a year.
Couples can register their interest to receive the Allowance.
The government estimates that more than four million married couples and 15,000 civil partnerships will be eligible for the tax break.
Chancellor of the Exchequer George Osborne said:
‘We made a promise to introduce a recognition of marriage into our tax system – and now we’re delivering on that promise.
This includes updating the tax system so that it recognises marriage and civil partnerships.
Our new Marriage Allowance means saving £212 on your tax bill couldn’t be simpler or more straightforward.’
From April, HMRC will contact those who have already registered for the ‘Marriage Allowance’ to apply. People can register at any point in the tax year and still receive the full benefit of the allowance. It is also possible to claim the allowance after the end of the tax year where claimants are unsure if they will qualify.
Applying online is simple. One person in a couple will apply online to transfer the allowance to their spouse or civil partner, and HMRC will tell the recipient about the change to their Pay As You Earn (PAYE) tax code.
Internet link: GOV.UK
Charities Digital Service launched
HMRC have launched an online registration service for charities.
Until now charities have been required to complete a paper form (ChA1). Approximately 15,500 new charities are registered each year.
Chief digital and information officer at HMRC, Mike Dearnley, said:
‘We are completely changing the way we work with our customers – including charities. Our new digital services are straightforward, easy to use and convenient. The charities service minimises the risk of making mistakes, so applications are less likely to be returned to the organisation’.
All registration must now be completed online. Please contact us if you would like help with a charity.
Internet link: Charities Digital
PAYE end of year – pay on time reminder
HMRC are reminding employers that with the end of the 2014/15 tax year approaching they will soon need to make their final 2014/15 PAYE (RTI) submission.
For most employers, the final submission will be their final Full Payment Submission (FPS) which advises HMRC about the very last employee payments for 2014/15 and this needs to be made on or before 5 April 2015. Details of how to make the final submission can be found on the GOV.UK website using the link below. Alternatively if you would like help with your payroll please do get in touch.
HMRC are also advising employers to take extra care as the deadline for electronic payment of 22nd March falls on a Sunday.
HMRC are advising that employers should ensure their payment reaches HMRC on time, which means that cleared funds should be in HMRC’s account by the 20th unless employers are able to arrange a Faster Payment. For more details about paying HMRC electronically visit Pay PAYE tax
HMRC concession for late RTI returns and payments
HMRC have announced that employers will not incur penalties for delays of up to three days in filing RTI returns. There is no change to the filing deadlines and employers should generally file their full payment submissions (FPS) ‘on or before’ each payment date unless a concession applies.
HMRC are also advising any employer that has received an in-year late filing penalty for the period 6 October 2014 to 5 January 2015 and was 3 days late or less, to appeal online by completing the ‘Other’ box and add ‘Return filed within 3 days’.
In addition, to prevent unnecessary penalties being issued, HMRC will be closing around 15,000 PAYE schemes next month that have not made a PAYE report since April 2013 and which appear to have ceased.
HMRC will write to the affected schemes to tell them about the planned closure and what to do if they are, or should be, operating PAYE.
Employers with fewer than 50 employees are reminded that PAYE late filing penalties will apply to them from 6 March.
Internet link: GOV.UK
Advisory fuel rates for company cars
New company car advisory fuel rates have been published which took effect from 1 March 2015. Due to the reduction in fuel prices many rates have reduced this quarter between two and three pence so please take care to update your expenses payments. However, the guidance states: ‘You can use the previous rates for up to one month from the date the new rates apply’. The rates only apply to employees using a company car.
The advisory fuel rates for journeys undertaken on or after 1 March 2015 are:
1400cc or less – 11p
1401 cc – 2000cc – 13p
Over 2000cc – 20p
1400cc or less – 8p
1401 cc – 2000cc – 10p
Over 2000cc – 14p
1600cc or less – 9p
1601cc – 2000cc – 11p
Over 2000cc – 14p
Other points to be aware of about the advisory fuel rates:
Employers do not need a dispensation to use these rates. Employees driving employer provided cars are not entitled to use these rates to claim tax relief if employers reimburse them at lower rates. Such claims should be based on the actual costs incurred.
The advisory rates are not binding where an employer can demonstrate that the cost of business travel in employer provided cars is higher than the guideline mileage rates. The higher cost would need to be agreed with HMRC under a dispensation.
If you would like to discuss your car policy, please contact us.
Internet link: GOV.UK
Car benefits online
As part of HMRC’s digitisation campaign, an online trial allows company car drivers to make changes to car and fuel benefits that will affect their tax codes.
It is important to ensure the benefits included in your tax code are as accurate as possible or large under or overpayments of tax may arise. For information on how to amend your tax code visit the link below. Alternatively if you would like help checking your tax code please do get in touch.
Internet link: GOV.UK